The proposed ordinance, if adopted, would amend the Berkeley Rent Stabilization and Eviction for Good Cause Ordinance to have the following material effects:
1. The measure would regulate units rented under the federal Section 8 program where the rent exceeds the maximum rent that is subject to federal subsidy i.e. "the payment standard". Under current law all Section 8 units are exempt because under the old federal Section 8 program, the rent that could be charged was limited to the payment standard.
2. Subsidized units rented by non-profit housing corporations to low-income tenants pursuant to a regulatory agreement with a governmental agency would be exempt from the registration and rent regulation provisions of the Rent Stabilization Ordinance.
3. Transitional housing units rented by non-profit organizations as an incident to recovery and shelter programs would be exempt from all but the Good Cause for Eviction provisions of the Rent Stabilization Ordinance except as preempted by the Transitional Housing Participant Misconduct Act. The eviction controls would continue to apply as long as the tenant remains eligible for the organization's program.
4. Interest on security deposits would have to be paid to tenants at the Federal Reserve rate for 6-month certificates of deposit. Current law requires landlords to place security deposits in federally insured bank accounts and pay tenants the actual amount of interest earned.
5. The City would be allowed to use information in Rent Board files for the enforcement of other City ordinances. The current ordinance prohibits such use of this information.
6. The base rent ceiling for a unit that was not rented on the operative base date would be the first rent charged, unless another rent was previously certified by the Rent Board. Under current law, the owner is required to set the base rent as a good faith estimate of the median rent for comparable units.
7. A landlord may not evict a tenant for violation of a lease's prohibition on subletting if the tenant replaces a roommate with a tenant who meets the landlord's customary occupancy qualifications and the landlord fails to articulate a well-founded reason for the refusal. Current law does not expressly restrict eviction under these circumstances.
8. Criminal penalties for violations of the Rent Stabilization Ordinance would be mostly eliminated except where a landlord is found guilty of willfully violating the eviction controls and the maximum penalty would be modified to conform to state law. Under current law, a landlord is subject to criminal penalties for the willful violation of any provision of the Rent Stabilization Ordinance.
9. Obsolete references to an "appointed" Rent Board will be eliminated.

Financial Implications The Rent Stabilization Board revenue may decrease by up to $20,000 annually due to loss of registration fees from units newly exempted from registration.

The Mayor, a unanimous City Council, and the Rent Board placed Measure P on the ballot to update the Rent Stabilization Ordinance and address issues raised since its enactment in 1980. Measure P is balanced and non-partisan - it benefits both tenants and property owners.

Yes on Measure P guarantees tenants that they won't be evicted for replacing a roommate with someone who the landlord does not have good reason to reject. This protection is important because shared housing is the only affordable housing option for many tenants, especially students.

Yes on Measure P simplifies the method for setting the base rent for previously exempt units, thereby eliminating a process owners have complained is onerous and confusing.

Yes on Measure P streamlines the process for calculating and refunding interest on tenants' security deposits, removing the complexities and uncertainties that have lead to disputes in the past. All tenants will receive the same interest rate and landlords will be relieved from the current restrictions on use of the deposits.

Yes on Measure P permits many City functions to be coordinated and operate more efficiently by allowing city agencies to use data already compiled by the Rent Board. Assemblymember Loni Hancock, Mayor Tom Bates, and Councilmembers Breland, Hawley, Maio, Shirek, Spring, Worthington, and Wozniak all urge you to VOTE YES ON MEASURE P.

Section 1. That Section 13.76.040.A of the Berkeley Municipal Code is amended to read as follows:
13.76.040 Definitions.
A. "Board" refers to the appointedelected Rent Stabilization Board established by this chapter and Article XVII of the Charter of the City of Berkeley.

Section 2. That Section 13.76.050.D and the introductory sentence to Section 13.76.050 of the Berkeley Municipal Code, listing exemptions from the Rent Stabilization ordinance, are amended and subsections "L" and "K" are added to Section 13.76.050 to read as follows:
13.76.050 Applicability.

This chapter shall apply to all real property whichthat is being rented or is available for rent for residential use in whole or in part, except for the following:
D. Rental units leased by the Berkeley Housing Authority under the Section 23 program (42 U.S.C. Section 1421b) or rental units leased to tenants assisted under the Section 8 program (42 U.S.C. Section 1437f) or the Shelter Plus Care Program (42 U.S.C. 11403 et. seq.) or similar federally funded rent subsidy program. However, eExcept as may be preempted by state or federal law, the exemption of such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings and Section 13.76.120, Individual Adjustments of Rent Ceilings, of this chapter. However, the exemption from Sections 13.76.080, 13.76.110 and 13.76.120 shall apply only for so long as the rent demanded does not exceed the authorized Payment Standard, which, for purposes of this subsection, is the maximum monthly rental assistance potentially available to an assisted household before deducting the household share of income paid for rent and utilities as established by the Berkeley Housing Authority or successor agency. For units where the rent demanded exceeds the Payment Standard, the Payment Standard or an initial rent above the Payment Standard if approved by the Berkeley Housing Authority, as reported to the board by the Berkeley Housing Authority or successor agency, shall become the unit's base rent ceiling and the reference point from which the rent ceiling shall be adjusted in accordance with Sections 13.76.110 and 13.76.120.
K. A rental unit in a residential property owned by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that is rented to a low income tenant and subject to a regulatory agreement with a governmental agency that controls the unit's rent levels. However, the exemption for such rental units from the terms of this chapter shall be limited to Section 13.76.080, Rent Registration; Section 13.76.100, Establishment of Base Rent Ceiling and Posting; Section 13.76.110, Annual General Adjustment of Rent Ceilings; and Section 13.76.120, Individual Adjustments of Rent Ceilings of this chapter and shall apply only for so long as the regulatory agreement is in effect. This exemption shall not apply to rental units at the property that are not subject to a regulatory agreement with a governmental agency or that are rented by a tenant who occupied the unit prior to the property's acquisition by the tax-exempt organization.
L. Rental units in a facility owned or leased by an organization exempt from federal income taxes under Section 501(c)(3) of the Internal Revenue Code that has the primary purpose of operating a treatment, recovery, therapy, sanctuary or shelter program for qualified clients, where such rental units are provided incident to the client's participation in the primary program and where the client has been informed in writing of the temporary or transitional nature of the housing at the inception of his or her participation in the program. However, except as may be preempted by the Transitional Housing Participant Misconduct Act (California Health and Safety Code Sections 50580 et. seq.) or other state or federal law, such rental units shall not be exempted from the terms of Section 13.76.130, Good Cause Required for Eviction. For purposes of Section 13.76.130.A.2, the client's continued eligibility for participation in the treatment, recovery, therapy, sanctuary or shelter program shall be deemed a material term of the client's rental agreement with the program's operator.

Section 3. That Section 13.76.070 of the Berkeley Municipal Code is amended to read as follows:
13.76.070 Security deposits.

Any payment or deposit of monies by the tenant, the primary function of which is to secure the performance of a rental agreement or any part of such agreement, including an advance payment of rent, shall be placedheld by the landlord, in an interest bearing account at an institution whose accounts are insured by the Federal Savings and Loan Insurance Corporationa fiduciary capacity for the benefit of the tenant and shall accrue simple interest at the rate equal to the average rates of interest paid on six-month certificates of deposit by insured commercial banks until such time as itthe payment or deposit is returned to the tenant or entitled to be used by the landlord as provided in Civil Code Section 1950.5. The interest earnedaccrued by said payment or deposit on moniesthrough October 31st of each year shall be returned to the tenant annually in December of each year, either through a rent rebate or cash payment, in December of each year.and shall be at a rate equal to the 12-month average of the average rates of interest paid on six-month certificates of deposit by insured commercial banks as published by the Federal Reserve Board on the first business day of each month for the prior 12 months ending on November 1st, rounded to the nearest tenth. On or before November 15th of each year, the board shall give public notice of the rate to be effective for the following December. Upon the tenant's departure from the premises, Tthe balance of any interest accruedearned by said payment or deposit on moniessince the last October 31st shall be paid at the average monthly rate from the last November 1st to the date of departure and shall be returned to the tenant along with the appropriate part of the principal and any prior unpaid interest.to the tenant upon departure from the premises.The board shall compute and publicize the interest rate applicable under this section on an ongoing basis.

Section 4. That Section 13.76.090 of the Berkeley Municipal Code is amended to read as follows:
13.76.090 Use and Confidentiality of information submitted to board.A. All information and forms required by this chapter and submitted to the board shall not be used by any other governmental unit of the City of Berkeley for the enforcement of the City of Berkeley ordinances other than this chapter.
B. The board shall adopt rules and regulations providing for the confidentiality of information submitted to the board in support of a petition for an individual rent ceiling adjustment under Section 13.76.120 of this chapter when such confidentiality is deemed necessary by the board and where otherwise permitted by state law.

Section 5. That Section 13.76.100 of the Berkeley Municipal Code is amended to read as follows:
13.76.100 Establishment of base rent ceiling and posting. A. Base Rent Ceiling. Upon adoption of this chapter, no landlord shall charge rent for any rental unit covered by the terms of this chapter affecting rents in an amount greater than the lawful rent which was actually due and payable on, or last preceding, May 31, 1980, under the periodic term of the rental agreement, in accordance with the provisions of the Temporary Rent Stabilization Ordinance, No. 5212-N.S., except as permitted by the board under Sections 13.76.110 and 13.76.120 of this chapter. Such lawful rent in effect on May 31, 1980, is the base rent ceiling and is a reference point from which the rent ceiling shall be adjusted in accordance with Sections 13.76.110 and 13.76.120. For such rental units where no rent was in effect on May 31, 1980, the base rent ceiling shall be the most recent lawful periodic rent in effect for that rental unit during the six months preceding that date. For such rental units where no periodic rent was in effect on May 31, 1980, or during the six months preceding that date and no other rent has been certified or determined by the board after hearing, the base rent ceiling shall be a good faith estimate of the median rent in effect for comparable units in the City of Berkeley on May 31, 1980the first periodic rent charged following May 31, 1980. B. Posting. The board may establish reasonable rules and regulations for the posting of rent ceiling and other relevant information to further the purposes of this chapter.
C. Previously Exempt Units. For rental units speci- fied in Section 13.76.050.F., the base rent ceiling shall be the rent in effect on December 31, 1981. For such rental units where no rent was in effect on December 31, 1981, the base rent ceiling shall be the most recent lawful periodic rent in effect for that rental unit during the six months preceding that date. For such rental units where no periodic rent was in effect on December 31, 1981, or during the six months preceding that date and no other rent has been certified or determined by the board after hearing, the base rent ceiling shall be a good faith estimate of the median rent in effect for comparable units, located in the same census tract, and similar in age, size, maintenance, upkeep, and servicesthe first periodic rent charged following December 31, 1981.

Section 6. That Section 13.76.130.A.2 of the Berkeley Municipal Code is amended to read as follows:
13.76.130 Good cause required for eviction. A. No landlord shall be entitled to recover possession of a rental unit covered by the terms of this chapter unless said landlord shows the existence of one of the following grounds:

1. The tenant has failed to pay rent to which the landlord is legally entitled pursuant to the lease or rental agreement and under the provisions of state or local law, unless the tenant has withheld rent pursuant to applicable law; and said failure has continued after service on the tenant of a written notice setting forth the amount of rent then due and requiring it to be paid, within a period, specified in the notice, of not less than three days.
2. The tenant has continued, after written notice to cease, to substantially violate any of the material terms of the rental agreement, except the obligation to surrender possession on proper notice as required by law, and provided that such terms are reasonable and legal and have been accepted in writing by the tenant or made part of the rental agreement; and provided further that, where such terms have been accepted by the tenant or made part of the rental agreement subsequent to the initial creation of the tenancy, the landlord shall have first notified the tenant in writing that he or she need not accept such terms or agree to their being made part of the rental agreement. Notwithstanding any contrary provision in this chapter or in the rental agreement, a landlord is not entitled to recover possession of a rental unit under this subsection where a tenant permits his or her rental unit to be occupied by a subtenant, provided:
a. The landlord has unreasonably withheld consent to the subtenancy; and
b. The tenant remains an actual occupant of the rental unit; and
c. The number of tenants and subtenants actually occupying the rental unit does not exceed the number of occupants originally allowed by the rental agreement or the board's regulations, whichever is greater.
d. Withholding of consent by the landlord shall be deemed to be unreasonable where:
(i) The tenant's written request for consent was given at least two weeks prior to commencement of the subtenancy;
(ii) The proposed new subtenant has, upon the landlord's written request, completed the landlord's standard form application or provided sufficient information to allow the landlord to conduct a standard background check, including references and credit, income and other reasonable background information; and
(iii) The proposed new subtenant meets the landlord's customary occupancy qualifications and has not refused the landlord's request to be bound by the terms of the current rental agreement between the landlord and the tenant; and
(iv) The landlord has not articulated in writing a well-founded reason for refusing consent.

Section 7. That Section 13.76.190 of the Berkeley Municipal Code is amended to read as follows:
13.76.190 Criminal penalties. Any landlord who is found by a court of competent jurisdiction to be guilty of a willful violation of Section 13.76.130 of this chapter shall be subject to up to a five hundred dollar $500 fine and/or ninety90 days in jail for a first offense and up to a $1000three thousand dollar fine and/or one yearsix months in jail for any subsequent offenses.